Editorial: Denunciation of land-buying racism spot on

Maurice Williamson. Photo / Hawke's Bay Today

Maurice Williamson clearly struck a nerve when he observed that opposition to foreign investment was more about racism than overseas ownership. As much was obvious from the Prime Minister's response.

John Key said the Land Information Minister was known for his strong sense of humour and, in this instance, it had backfired. Yet Mr Williamson's speech to a small-business conference at Massey University made eminent sense.

It was also a refreshing statement from a minister charged with making the final decision on controversial foreign investments.

Mr Williamson did not refer specifically to the bid for the Crafar family farms, New Zealand's biggest dairying empire, by a Chinese company. He did not have to.

The issue has stirred up a wave of xenophobic scaremongering over China's intentions for the dairying industry. Among other things, a group called Save the Farms has sprung into being. It wants the Government to stop any sales until the country has had a robust public debate.

The group says it is "not a xenophobic organisation". If so, why was it silent last week when an American billionaire, William P. Foley II, was cleared by the Overseas Investment Office to buy Wharekauhau, an exclusive 2023ha Wairarapa country estate and farming business?

And why did its organisers say nothing as Britons, Italians, Americans, Israelis and Australians bought the bulk of more than 150,000 hectares of New Zealand farm land - almost the size of Stewart Island - over the past five years? During that period, China hardly registered as a source of foreign investment.

Now, however, its first major foray has hit a wave of resistance.

Those who have been buying the vast majority of New Zealand's farm land are distinguished by two characteristics. They are English-speaking and they are non-Asian. As Mr Williamson noted, "if you look different, you're a foreigner but if you come from the other side of the world, from Scotland, then you're not".

He could, and perhaps should, have added that the laws on overseas investment make no such ethnic distinction. They are colour-blind, and must remain so.

Unfortunately, the anti-Chinese sentiment is having an impact. Last month, the Finance Minister acknowledged that a review of foreign investment rules, which has dragged on for 16 months, was unlikely to deliver much of the gain originally hoped for. This exercise was meant to attract more investment by making it easier for foreigners to do business here.

Now, it is more likely to be the catalyst for a "national interest" test, which would be kept in reserve for bids that are politically uncomfortable. This would be a backward step. The contribution that efficient foreign owners can make to the economy must be the ultimate arbiter of approval.

Mr Key, among others, seems to have lost sight of that. When the Crafar farms issue first appeared, he, quite rightly, chastised the Agriculture Minister for saying a sale to a Chinese company was unlikely to go through.

Subsequently, however, he has been swayed by those uttering concerns about the sale. He could have reacted by condemning anything that smacked of racism. He could also have pointed out that foreign investment has always driven the New Zealand economy, and that any errant decision would send the wrong message to all potential investors.

Instead, Mr Key chose to voice vague worries about New Zealanders becoming tenants in their own country. He has now got into even more of a tangle by trying to dismiss Mr Williamson's comment as backfiring humour.

It was, in fact, a well-reasoned denunciation of the xenophobic outpouring against the Chinese bid for the Crafar farms. And it needed to be said.